With no resolution of budget impasse in sight,
Senate Democrats push stopgap spending plan
With no breakthrough in the budget standoff between the House and Senate and the start of the new fiscal year just days away, attention turned to passing a stopgap revenue measure that would keep state government running and delay the sunset on the additional half-cent sales tax and the higher income tax rate on wealthy individuals. Unless the General Assembly acts by June 30, those two taxes will automatically end and the state’s revenue problem worsens by $384 million.

Senate Democrats on Thursday trotted out a continuing resolution that would delay the sunset on the two taxes and continue funding state government at current levels through July 31. It passed second-reading on a 26-20 party line vote. The measure is calendared for a final vote Monday night before going to the House, where an uncertain fate awaits. House leaders say the rank and file don’t like the continuing resolution approach because it would force them to vote again to continue two taxes that are about to sunset.

Assuming the Senate votes Monday for the stopgap plan, it would arrive in the House on Tuesday. If it’s calendared and fails to pass, as some predict, that would leave just three regular legislative session days before the end of the fiscal year.

As we detailed for you in last week’s Bulletin, the Senate has offered a budget compromise that relies on $330 million in new taxes on cigarettes and alcoholic beverages. The House responded to that plan Monday with an offer eschews those taxes but comes $20 million closer to the Senate’s higher levels of spending for education and social programs. That leaves the two chambers relatively close to each other on the bottom line for spending in the first year of the biennium. The real problem now is the second year, when the state won’t have a federal windfall to help cover its revenue shortfall. The state recently received $510 million as its share of a $20 billion appropriation to help states recover from the recession, and legislators plan to earmark all of it for next year’s budget.

Meanwhile, state employees are getting grumpy that both the House and Senate are looking to save money by tightening eligibility standards for disability benefits. Now, an injured state employee becomes eligible for disability – which can amount to as much as 65 percent of their pay – if they are unable to return to the same job they had before. The Senate believes the state could save $86 million (the House puts the figure at $58 million) by extending disability only to those employees who are unable to work any job they are reasonably qualified for by training or experience. That’s pretty close to existing federal guidelines for disability.

A greater concern is the health plan for state employees is about to go broke again. Jack Walker, administrator of the Teachers and State Employees Comprehensive Major Medical Plan, on Wednesday told a legislative panel that the plan will run out of money in May unless benefits aren’t sharply curtailed or the state makes a $421 million contribution.  He said plan expenses are rising 13 percent a year. Among other steps, Walker said he was considering reducing reimbursements to doctors by 20 percent and to hospitals by 6 percent.

Meanwhile, about 1,500 members of the N.C. Association of Educators rallied in Raleigh Wednesday to urge passage of an education lottery.

House votes to extend sunset
on qualified business venture tax credit
A measure extending the sunset on the only state tax credit that helps small, high-tech start-up companies unanimously passed the House on June 12 and is now awaiting action by the Senate Finance Committee. H. 1294 Extend Qualified Business Venture Tax Credit extends the tax credit, which is scheduled to expire next year, through Jan. 1, 2007. Numerous business organizations, including NCCBI, support the bill, which is sponsored by Rep. Gordon Allen.

Enacted in August 1987, the qualified business investment tax credit is allowed to individuals and pass through entities. For individual taxpayers, the credit is for those who purchase the equity securities or subordinated debt of a qualified business venture or a qualified grantee business directly from that business. The credit is equal to 25 percent of the amount invested and may not exceed $50,000 per individual in a single taxable year. An individual investor may also claim the allocable share of credits obtained by "pass-through entities" of which the investor is an owner. Pass-through entities include limited partnerships, general partnerships, S corporations, and limited liability companies. To be eligible for the tax credit, an individual investor must file Form D-499, Application for Tax Credit for Qualified Business Investments, with the Department of Revenue on or before April 15 of the year following the calendar year in which the investment was made. Any unused credit may be carried forward for the next five years.

The total amount of credits allowed to all taxpayers for investments made in a calendar year may not exceed $6 million. The Secretary of Revenue calculates the total amount of tax credits claimed from applications filed with the Secretary of State. If the amount exceeds the cap, then the Secretary of Revenue allows a portion of the tax credits claimed by allocating the total of $6 million in tax credits in proportion to the size of the credit claimed by each taxpayer.

Section 2 of the bill adds qualified licensee businesses to the list of entities that taxpayers may invest in to get a qualified business tax credit. Qualified licensee businesses have less than $1million in gross revenues and are under contract with a doctoral research university or a UNC system school to commercialize technology developed by the university or institution. Section 2 also expands the definition of qualified grantee business to include nonprofits organized to stimulate the wireless industry and the networking and related industry. This will make investors in MCNC-Research and Development Institute grantees eligible for the tax credit.

Air permit bill advances in House
Following weeks of negotiations, NCCBI and the Manufacturers and Chemical Industry Council of North Carolina (MCIC) have reached an agreement with the Governor’s Office, the N.C. Department of Environment and Natural Resources (DENR) and representatives of the major environmental groups on legislation that will allow industries to begin construction on expansions of their facilities prior to obtaining an air permit.

The compromise bill, just as proposed in the original bill, does not change any air quality standard; does not allow a facility to operate without meeting all state and federal requirements and receiving all needed permits; and does not affect any federal requirement nor relieve any business from preconstruction or construction prohibitions imposed by any federal requirement. The bill does allow a business to go forward and begin construction or modifications to an existing facility at the same time the company is moving forward to finalize their permits.

“I am pleased that we were able to work out a compromise that will help business and industry move more quickly on projects, “ NCCBI Vice President Leslie Bevacqua said. “This will definitely give an advantage to companies in our state who want to expand their facilities. Working together the groups came out with a proposal that I believe will work to the advantage of businesses and at the same time assure the public that environmental concerns are being met.”   

As approved by the Senate Finance Committee on Wednesday, the bill limits construction at new facilities to clearing and grading; development of access roads, driveways, and parking lots; installation of underground utilities; and construction of accessory structures that are not part of the pollution control equipment such as fences and office buildings. A new facility can do these things without giving advance notice to DENR.

An existing facility is allowed to apply for permission from DENR to begin construction or modifications to the air pollution sources and/or pollution control equipment, before a permit is issued – subject to certain requirements. Requirements include 15-day notice to DENR and to the public. DENR is to review the information submitted by the applicant within the 15-day time frame and determine if it meets the following specified criteria: 1) has the facility been in substantial compliance; 2) will the modification or expansion result in emissions that are the same or similar to what is already being emitted from the site; 3) will the modification have a significant effect on air quality; 4) is the permit likely to be issued. If the department determines that all these criteria have been met, it must notify the applicant that construction may begin

The bill will be considered by the full Senate on Monday and will then proceed to the House for consideration.


House panel approves major change in economic development policy
The House Finance Committee on Wednesday favorably reported a committee substitute for H. 1318 (Luebke) Modernize Bill Lee Act, a measure that would scrap North Carolina’s main economic development tool and replace it with a cash-incentive system targeted at distressed communities. The bill was then referred to the Appropriations Committee. The measure moves North Carolina away from its policies of awarding tax credits for companies that create new jobs, provide worker training, purchase equipment and investment in research and development. In their place, the measure would create a cash grant system in which companies that create new jobs would receive grants proportional to the amount of state income taxes paid by workers in those jobs. However, the grants would be greater in poor counties. Grants would range from 10 percent to 75 percent of the income tax generated by each new job, up to $6,500 for any one job per year. The legislation would cap the total amount of such grants in any one year at $29 million. Existing R&D credits and other inducements previously approved by the General Assembly, such as those for FedEx and Nucor, would stay on the books. Commerce Secretary Jim Fain was noncommittal about the legislation but he said he believes eliminating job tax credits could hurt North Carolina's competitiveness.

Tourism Investment Act amended, approved by key committee
The House Appropriations Committee on Thursday amended and then favorably reported H. 1316 (Earle, Miner and McComas) N.C. Travel and Tourism Investment Act, legislation that would hand out up to $20 million a year in tax rebates to help local governments build, expand or renovate travel and tourism projects in the state. Each grant would be capped at $2 million and the entire program would sunset in three years. The rebates would come from the increased sales and privilege license taxes the tourism projects would generate.

The bill effectively earmarks a proportion of state tax revenue drawn from a particular qualifying project and returns that funding to the institution to fund capital costs and debt service. The proportion returned varies by location and other factors. The bill would allow funding for 15 projects a year, with a maximum of 45 grants awarded before the legislation sunsets on July 1, 2006. Among other restrictions added to the bill by the committee was an amendment by Rep. Martin Nesbitt (D-Buncombe) requiring that the grants be equally divided among the state's 13 congressional districts.

The grant program would be administered by the Travel and Tourism Grant Committee. The committee would receive applications from cities and counties and approve those that meet the following criteria:

 The project is financed and at least partially owned by a local government in which it is located.  The local government must own at least 50 of projects in counties in tiers 4 and 5 and at least 25 percent in the remaining tier counties.
 The project will target 35 percent or more of its visitors from at least 50 miles away or out of state. However, the target level could be as low as 15 percent in tiers 1, 2 and 3.
 The project has a business plan that indicates that project will be profitable,
 The applicant provides tax impact projections.
 The project will have a positive impact on the community.
 The project will be open at least 100 days per year.
 The project will generate at least 10 new jobs in the local area. The jobs must meet the wage standards set out in the Bill Lee and the JDIG economic development incentive programs.
 The projects will meet a minimum cost criteria based on the North Carolina enterprise tier in which it is located.
 The local government must pass a resolution stating the need for, positive economic impact of, and the enhanced travel and tourism opportunities created by the project.
 The applicant demonstrates that the project will not duplicate services and will draw new visitors to the area.

Senate passes measure addressing shipments of wine
Legislation to allow out-of-state wineries to ship wine directly to consumers in North Carolina passed the Senate this week. S. 668 (Metcalf) Wine Shippers Permits was introduced as a result of a 4^th Circuit Appeals Court ruling that made it unconstitutional for North Carolina wineries to have direct access to Tar Heel consumers when out of state wineries do not have the same option. This legislation allows out-of –state wineries to purchase a wine shipper permit from North Carolina and as long as they follow the requirements set out in the law (payment of taxes, the number of cases that can be shipped, etc) they would be allowed to ship directly to N.C. consumers. If out-of-state wineries continued to be barred from shipping to N.C. consumers, N.C. wineries would also lose their ability to ship directly to consumers.  This legislation helps the growing wine industry in N.C. and is supported by wineries across state, NCCBI and the Agribusiness Council. The bill now goes to the House for consideration.   
 
Legislative Actions

  The House Finance Committee on Thursday briefly discussed H. 1290 Conform Bank Expense Deduction and H. 1291 Subsidiary Dividend Tax Changes. Both bills were referred to the Revenue Laws Study Commission for further study after the legislature adjourns.

  The House on Tuesday gave final approval to a bill that would allow private entities to build bridges over state roads as long as the bridges are deemed necessary and meet all DOT standards. H. 824 (Allred) Department of Transportation Bridge Encroachments now goes to Gov. Mike Easley.

 The House on Tuesday concurred with Senate amendments to H 1221 (Decker) Return Overpayments of State Funds and the measure was enrolled.

 The House on Wednesday gave third-reading approval to S. 593 (Albertson) Extend Swine Moratoria and the measure, which extends the current moratorium on large hog farm lagoons, through 2007, was enrolled.

 The House gave second- and third-reading approval Tuesday to S. 773 (Dalton) Community College Facility/Public-Private Partnerships and the measure was enrolled.

 The Senate on Tuesday concurred with House amendments to S. 652 (Metcalf) Airport Authority Debt Financing and the measure was enrolled.

 The Senate on Tuesday gave final approval to H. 147 (Gulley) Left Turn on Red and returned the bill to the House for concurrence in amendments. The amendments stripped the bill of its major substance – allowing motorists, after stopping at a red light, to make a left turn from a one-way street onto another one-way street.

 The House on Tuesday concurred with Senate amendments to H. 562 (Alexander and Rhodes) Charlotte Photo Speed-Measuring Systems and the measure was enrolled. The bill would allow Charlotte-Mecklenburg police to use radar cameras to catch speeders starting early next year. Offenders would signature.

 The House Finance Committee on Tuesday favorably reported S. 119 Expand Historic Preservation Credit, H. 758 Ban Shrimp Nets/Certain Inland Waters, H. 806 Rebate and Grant Program for Alternative Fuel Vehicles, H. 1049 Licensed Psychological Associates/Insurance Payments and H. 1072 Regulate Ticket Brokers.
 
 The Senate on Thursday gave second-reading approval to H. 684 Psychiatric Hospital Financing, the House-passed measure that specifies Butner as the site for North Carolina’s new $110 million psychiatric hospital. The $110 million facility would be financed over 20 ears with certificates of participation.

 The Senate Finance Committee on Wednesday favorably reported S. 20 (Bingham) Regulate Professional Employer Organization, a measure that would require state licensing of employee leasing companies.

 The Senate Commerce Committee on Tuesday favorably reported H. 339 Life and Health Insurance Omnibus, H. 994 Public Works Exemption and H. 1213 Regulate Deferred Deposit.

 The House on Wednesday adopted a conference committee report on S. 775 (Dalton) Prelitigation Mediation of Insurance Claims.

 The House on Wednesday gave third-reading approval to S. 293 (Thomas) Sales Representative Commissions Revisions and returned the bill to the Senate for concurrence in amendments.


New Laws on the Books
 Gov. Mike Easley on Wednesday signed into law H. 357 No Credit Card Numbers on Receipts, an act that makes it an infraction for any one who accepts credit, charge or debit cards for business transactions to print more than five digits of the card number or the expiration date on any receipt with the intent to provide the receipt to the cardholder at the point of sale. This applies to cash registers and other such devices employed for the first time after March 1, 2004. It also makes it an infraction for anyone to sell or offer for sale a cash register or other machine or device that electronically prints receipts for credit, charge or debit card transactions that cannot be programmed or operated to produce a receipt with five or fewer digits and with no expiration date.


State Government
Gasoline tax edging upward on July 1
The North Carolina motor fuels tax for gasoline, diesel and alternative fuels will increase from 23.4 cents to 24.2 cents per gallon for the six-month period beginning July 1. The 24.2-cent rate includes a flat rate of 17.5 cents per gallon and a wholesale component of 6.7 cents per gallon. The N.C. Department of Revenue sets the amount of the wholesale component twice a year. The wholesale component is 3.5 cents or 7 percent of the average wholesale price of motor fuel during the preceding six-month base period, whichever is greater. The average wholesale price is a weighted average of the wholesale prices of gasoline and No. 2 diesel fuel. The average price for the last base period was 95.92 cents per gallon. The new tax rate should be used beginning with gasoline, diesel and alternative fuel reports filed for July 2003 that are to be filed with the Department of Revenue in August. The state motor fuels tax is included in the retail price paid by consumers at the pump.

N.C. students outpace nation in gains on reading test
North Carolina students continued to improve their reading performance and performed above the national average on the National Assessment of Educational Progress (NAEP) 2002 assessment. Results of the NAEP, often referred to as The Nation's Report Card, were released Thursday by the U.S. Department of Education. Tar Heel fourth graders had a nine-point gain in reading performance while fourth-graders nationally increased by four points. For grade eight, the other grade tested, North Carolina's score increased by three points while eighth graders nationally improved by two points. "NAEP is the standard we use to compare ourselves with other states and these results show that our students are outpacing the nation on gains and are competitive regionally and nationally,” said Gov. Mike Easley.  Said state Superintendent Mike Easley: “The fact that our students continued to make progress, including significant progress in grade four, is a tribute to the work that is being done to ensure that every child is reading at high levels." State Board of Education Chairman Howard Lee said, “reading is such an essential skill for all other learning. We're pleased with these results and expect to see such progress continue." State officials attribute the gains to the alignment of the English Language Arts curriculum that was adopted in 1999 and training for school staff members in using the curriculum, the hard work by teachers in delivering the curriculum, and the federal Reading Excellence grant that provided $16 million to certain low performing schools.

DOT plans hearing on Troy bypass
The N.C. Department of Transportation will hold an informational workshop on the proposed N.C. 24/27 Troy Bypass on Tuesday, June 24, from 4 p.m. to 7 p.m. in the West Montgomery High School Auditorium. NCDOT proposes to construct a bypass of Troy using N.C. 24/27 from Dairy Road to east of the Little River. Five alternatives are being considered for this project. One alternative calls for improving the existing N.C. 24/27 roadway and the other four alternatives would be on new location. Representatives from NCDOT will be available to answer questions and receive comments from the public about the proposed project. For more information, contact Michael Penney at (919) 733-7844 or email: mpenney@dot.state.nc.us.

Congestion warning signs to be erected along interstates in Asheville
The N.C. Board of Transportation awarded contracts worth $1.3 million to install eight overhead message signs along Interstates 240, 40 and 26 in Buncombe and Henderson counties. The message signs will warn motorists of traffic congestion ahead and comes just as the opening of I-26 in Madison County is expected to send many more vehicles through the Asheville area.


Economic Development
Biotech center opens satellite office in Triad
The North Carolina Biotechnology Center, in partnership with leading organizations in the Piedmont Triad, opened a new satellite office in Winston-Salem on June 16 to help develop the area's growing biotechnology industry. The office, located in the Piedmont Triad Research Park, is the first of four satellite offices planned across the state to strengthen biotechnology development in areas beyond the technology-rich Research Triangle. Other offices are planned for Asheville, Charlotte and Eastern North Carolina.

The Piedmont Triad office is the result of a partnership among the Biotechnology Center and several organizations in the area, including Wake Forest University Health Sciences, Idealliance, the Winston-Salem Chamber of Commerce and the Piedmont Triad Partnership. In addition, 21 county commissions, city councils and economic development groups in the region have unanimously passed resolutions endorsing the office.

Wake Forest University Health Sciences will donate $200,000 over two years to staff the office with a director and an assistant and will provide office space in the research park. Forsyth Technical Community College will donate two computer workstations, and WinstonNet, a local nonprofit organization, will provide high-speed Internet access. The Biotechnology Center will provide $25,000 and possibly more in the future, depending on availability of funds from the General Assembly.

The Biotechnology Center has begun a search for a director to lead the Piedmont Triad office and expects to have one in place later this summer. The director and a full-time assistant will coordinate closely with the center's 50-person staff in RTP. The Biotech Center is a private, non-profit corporation supported by the General Assembly. Its mission is to provide long-term economic and societal benefits to North Carolina by supporting biotechnology research, business and education statewide.

Golden LEAF Foundation accepting grant applications
The Golden LEAF Foundation, which administers one-half of the state's tobacco settlement funds, is accepting applications for its 2003 grant cycle, during which it will hand out about $12 million. The deadline for submitting grant applications is Aug. 1. Winners will be announced after Dec. 1. Priority will be given to projects in the areas of agriculture, economic development, and workforce preparedness. The foundation said it’s particularly interested in grant applications that:
 
 Expand market opportunities for agricultural products.
 Assist farmers with cost-effective production techniques that result in increased profitability.
 Support farmers making the transition into alternative agricultural enterprises.
 Provide support for initiatives that result in job creation and retention in tobacco-dependent and low-wealth counties.
 Support training initiatives that target job opportunities in new and expanding industries and businesses located in tobacco-dependent and economically distressed areas of the state.
 Improve small business performance in tobacco-dependent and economically distressed areas of the state through responsive and effective technology and business training.
 
Golden LEAF's primary mission is long-term economic advancement and helping North Carolina make the transition from a tobacco-dependent economy. Government and 501(c)(3) tax-exempt organizations are eligible to apply for grants. The foundation cannot make grants to individuals or for-profit businesses. A complete list of Golden LEAF's grant priorities, grant guidelines and application materials can be found at http://www.goldenleaf.org/grantover.html.


Legal Beat
High court strengthens ‘medical certainty’ standard in workers comp
Employees must provide conclusive medical testimony – not merely speculation – that a workplace accident was the cause of an injury before they can receive workers’ comp benefits, the N.C. Supreme Court ruled in overturning a decision by a divided Court of Appeals. The case involved a woman who worked at a rest home near Charlotte who claimed that twisting her leg on the job caused the deep vein thrombosis (DVT) later diagnosed in that leg. She sought workers’ comp benefits, which the Industrial Commission granted despite medical testimony that other physical conditions, including the woman’s age, weight and high blood pressure, also could have caused the condition. The rest home took the case to the Court of Appeals, which, in a 2-1 decision with Judge John Tyson dissenting, agreed with the Industrial Commission. The rest home appealed that decision to the Supreme Court, which issued its ruling June 13. The case is Holley v. ACTS Inc., No. 482AO2.

In a decision written by Chief Justice I. Beverly Lake Jr., the high court strengthened a long-standing precept in North Carolina known as the “medical certainty standard.”  The high court said that in a workers’ comp claim, the employee has the affirmative obligation to show through conclusive medical evidence that the workplace accident caused the injury and not on the employer to show that the injury could have been caused by some other factor. Lake highlighted testimony presented by the woman’s doctor that he could not say for sure what caused her DVT, a condition that often causes dangerous blood clots in leg veins. It could have been caused by the leg strain she suffered on the job although it also could have been caused by her high blood pressure, her weight, the fact she was taking an estrogen replacement drug or one of several other conditions she suffered.

Judge Tyson said he was pleased the Supreme Court relied on his dissent in its ruling. ”It is very helpful to the bench and the bar when the Supreme Court sets out the standards required to establish an element of a claim. This decision supplies the needed certainty in a very important area of the law,” he said.

Supreme Court strikes down county employment anti-discrimination law
It’s unconstitutional for individual counties to enact ordinances that permit citizens of that county to sue their employers for job discrimination, the N.C. Supreme Court ruled in a case that tested whether Orange County could legally sue Blue Cross and Blue Shield of North Carolina for firing an employee. The high court sided with Blue Cross in ruling that any local ordinance that grants private citizens a right to sue their employers for employment discrimination violates a section of the state constitution which bars the General Assembly from enacting any local law regulating labor, trade, mining or manufacturing. The court said there was no reasonable basis for treating Orange County differently from other counties on the issue of employment discrimination. 

Under federal law, the Equal Employment Opportunity Commission (EEOC) is authorized to investigate charges of employment discrimination. Federal law also provides employees with a right to sue their employers for employment discrimination at the conclusion of any investigation by the EEOC. Federal law permits, but does not require, states or local governments to enact discrimination statutes or ordinances provided any such state law is not inconsistent with the requirements of federal law. Thus, in many states, when an employee files a charge of discrimination, employers are subject to investigation by both the EEOC and a local or state agency. North Carolina has not enacted either a statewide private cause of action for employment discrimination or a state statute or agency to enforce an anti-employment discrimination law.  However, the General Assembly has passed legislation authorizing several counties to enact anti-discrimination ordinances that are enforced by county agencies and under which employees can sue their employers.

The Orange County Civil Rights Ordinance was an example of a local anti-discrimination ordinance authorized by the General Assembly. The Orange County ordinance prohibited discrimination in employment in all of the areas regulated by federal law and also prohibited discrimination based on two categories not covered by federal law -- familial or veteran status.  Thus, employers in Orange County were subject to regulation by both the EEOC and the Orange County Human Relations Commission and could be sued for employment discrimination under both federal and state law. In contrast, employers in almost all other counties in North Carolina are only subject to regulation by the EEOC and can be sued for employment discrimination only under federal law.

The decision in Williams v. Blue Cross, No. 277PA01, casts serious doubt on the constitutionality of other local employment discrimination ordinances such as those that have been authorized by the General Assembly and enacted in Durham and New Hanover counties.  However, the decision implies that the General Assembly is free to enact a statewide statute that applies to all employers in all counties if it concludes that employers in North Carolina should be subject to regulation by both the EEOC and a second state agency that duplicates the authority of the EEOC.  The General Assembly also could constitutionally enact legislation giving all, and not just a selected few, counties the authority to enact local anti-discrimination in employment ordinances.  A bill proposing to grant all counties this authority was introduced in April by Sen. Ellie Kinnard (D-Orange). The measure, S. 798 City/County Anti-Discrimination Ordinances, has remained in the Senate Judiciary II Committee since then.

The Orange County Civil Rights Ordinance also regulates discrimination in housing and public accommodations. These portions were not challenged subject to the lawsuit in Williams, and a question remains as to whether these provisions are also unconstitutional local laws.

High Court finds error in dismissal of SEANC suit
The N.C. Supreme Court reversed a decision by the state Court of Appeals dismissing a lawsuit by the State Employees Association of N.C. (SEANC) that sought to enjoin the state from withholding appropriations for the state employees retirement fund. NCCBI had filed a friend of court brief in the case supporting the state’s position. The high court’s unanimous decision was based on a dissent written by Appeals Court Judge John Tyson. In that dissent, Tyson agreed with the majority that the trial court had proper jurisdiction to dismiss SEANC’s lawsuit in its entirety at a hearing last year on the state’s motion for a temporary restraining order. But he said the majority was wrong in tossing out the lawsuit on grounds that SEANC lacked standing. The Appeals Court majority said SEANC lacked standing because not every one of its members would be harmed by the state’s decision to withhold contributions to the retirement fund. Tyson said an association does not have to prove that each and every one of its members would be harmed by an action before it would have standing to oppose the action in court. The Supreme Court agreed, and remanded the matter to the lower court for disposition based on the assignments of error cited in Tyson’s dissent.

U.S. Supreme Court to resolve Southeast Compact dispute
The U.S. Supreme Court agreed Monday to decide whether North Carolina must pay a $90 million fine for dropping out of the Southeast Compact Commission, the group of southeastern states that once planned to create regional radioactive waste dumps. North Carolina withdrew from the compact in 1999 after a site a site south of Raleigh was chosen to accept waste from other states in the group.

NCCBI News
Businesses urged to support child fingerprint program
According to a U.S. Department of Justice study, about 58,200 children are abducted each year by non-family members, with about 45 percent of those incidents being perpetrated by strangers. This startling statistic caused the American Football Coaches Association to launch the National Child Identification Program. The FBI has partnered with the Coaches Association in this non-for-profit program with the goal of providing inkless fingerprint identification kits for all 60 million children in the United States. The coaches association consists of NFL, NCAA, and high school coaches nationwide. Among the members known in this area are Chuck Amato of N.C. State University, Lou Holtz of the University of South Carolina, and Carl Franks of Duke.

When the program began, fewer than two percent of parents had a copy of their children's fingerprints to provide to law enforcement agencies in case of emergency. In the past six years, more than 13 million ID kits have been distributed at football stadiums, schools and churches across the country. The inkless fingerprint ID kit allows parents to fingerprint their children in the privacy of their homes and provides sections for pictures and medical and physical information. The completed kit is kept by the parents or guardians and can be immediately provided to law enforcement if needed to help locate a missing child.

The U.S. Chamber of Commerce is calling on the business community to get involved in this project. NCCBI is also supporting the nationwide effort. "There are at least two ways North Carolina businesses can get involved," NCCBI President Phil Kirk said. "Individual businesses can obtain ID kits for their employees, customers, local schools, or churches in increments of 100 kits per order. Or local chambers of commerce can join with local schools by sponsoring ID kit distributions in their communities, coordinating efforts with local law enforcement officials and school officials." This project is actively supported by the National Association of School Administrators to provide the I D kit distribution through the school districts. For more information on this program, call (2l4) 630-2245, visit the website at http://www.childidprogram.com  or e-mail info@childidprogram.com. 

Names in the News
New chancellor appointed at Fayetteville State
Thelma Jane "T.J." Bryan (left), vice chancellor for academic and student affairs at the 14-university Pennsylvania State System, was named chancellor of Fayetteville State University on Wednesday. In a unanimous vote by the UNC Board of Governors, Bryan was elected to succeed the retiring Willis McLeod, who was chancellor of the historically black university for nearly nine years. She will start the job July 1 at a salary of $187,000. Bryan, 57, is the second chancellor to receive a contract from Broad. She will have a three-year appointment through June 2006.

 Garland B. Garrett Jr., the former state Transportation secretary, was sentenced to five months in a minimum-security federal prison at Seymour Johnson Air Force Base starting Aug. 15, followed by five months in a halfway house. Garrett also must pay a $5,000 fine and complete two years of probation. Garrett, 63, pleaded guilty last September to one count of operating an illegal gambling business. His son, Garland "Trey" Garrett III, was sentenced to two years of probation and ordered to complete 120 hours of community service. He pleaded guilty in December 2001 to operating an illegal gambling business and agreed to testify against his father and grandfather. The sentencing caps a three-year investigation into illegal gambling in the state using video poker machines. U.S. Attorney Frank Whitney also announced that Pedroland Inc., which owns the South of the Border attraction, pleaded guilty to participating in an illegal gambling business and agreed to pay a $400,000 fine.

 Karen Ponder, president of the N.C. Partnership for Children, the group that oversees the Smart Start program, received the James and Carolyn Hunt Early Childhood Award for outstanding service on behalf of young children in the state. Prior to joining the Partnership for Children, Ponder helped develop the Smart Start initiative at the state and community levels.

 Darlene Waddell, currently the organization’s CFO, was named executive director of the Global TransPark Authority. Interim director Charles Edwards, who had applied for the permanent job, will leave at the end of June.

 

Washington Watch
Ballenger says homeland security bill will help textiles
The U.S. House Appropriations Homeland Security Subcommittee approved legislation last week boosting the new Department of Homeland Security's (DHS) ability to stop illegal importation of textile goods, a practice known as transshipment. Transshipment occurs when a country such as China fraudulently exports goods to the United States through a third party country, such as Vietnam, to gain an unfair advantage in the market.  The bill appropriates $9.5 million to hire 70 new U.S. Customs Service personnel who will specialize in enforcing international trade laws as they relate specifically to textiles. North Carolina Cong. Ballenger (R-10^th) has urged Secretary Tom Ridge and Homeland Security Subcommittee Chairman Hal Rogers (R-KY) advocating the need for the funds on behalf industries in the 10th District. "China and other offenders are breaking the rules of trade. This bill shows that Congress is committing resources to stop them," said Cong. Cass Ballenger (R-10^th).  Additional funding to stop transshipment was a key promise made to Ballenger and other members of the House Textile Caucus who supported legislation to grant President Bush's request for Trade Promotion Authority in 2001.

Chamber urges passage of OSHA fairness law
The U.S. Chamber of Commerce told a House subcommittee this week that enforcement of the Occupational Health and Safety Act falls disproportionately on small businesses.  “Large employers can afford to hire lawyers and prove their innocence, but small employers have no such option,” said Arthur Sapper, a member of the OSHA Practice Group of the law firm of McDermott, Will and Emery and a member of the Chamber’s Labor Relations Committee. “I have seen with my own eyes small employers who have to accept OSHA citations and penalties that the commission would throw out if it were free to do so,” said Sapper. “I have had to tell small employers and medium-size employers, ‘Yes, you are right, OSHA is wrong, but you can’t afford to prove it.’”  The Occupational Safety and Health Fairness Act of 2003 (H.R. 1583), introduced by Charlie Norwood (R-GA), chairman of the House Workforce Protections Subcommittee, would address many of the enforcement inequities in the current system. It would improve the ability of small employers to respond to charges, provide for reimbursement of their attorney fees and costs when they prove their innocence, and more clearly define guidelines for penalty assessments and violations.

House approves permanent death-tax repeal: By a 264-163 vote, the House on Wednesday passed a permanent death-tax repeal bill H.R. 8 (Dunn—R-WA).  Some 41 Democrats and 223 Republicans voted for the bill. Action now shifts to the Senate, where a close vote is likely.

Senate panel begins asbestos markup: The Senate Judiciary Committee on Thursday began markup of asbestos litigation reform bill S. 1125.  Markup is expected to continue into next week.  Congress Daily reports that organized labor will be urging senators to reject Chairman Orrin Hatch’s (R-UT) bill and to not seek improvements via amendments.  That puts many committee Democrats in an awkward position, having promised to work with Sen. Hatch, labor, industry and insurance groups supportive of a federal asbestos solution. 

Medicare sees degree of bipartisanship in Senate: Floor action on Medicare prescription-drug bill S. 1 continued Wednesday, as six Democrats and one Independent crossed traditional lines to oppose the Stabenow (D-MI) amendment.  Defeated 53-37, it would have expanded the federal role in the bill’s drug provisions. Floor action continues through next week.

Presidential hopeful endorses stock-option reform bill: Former House Minority Leader Dick Gephardt (D-MO) has come out in favor of stock-option reform bill H.R. 1372 (Dreier—R-CA/Eshoo—D-CA) and companion bill S. 979 (Ensign—R-NV/Boxer—D-CA).  The bills respond to International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) plans to mandate expensing of employee stock options on corporate financial statements.  The House Capital Markets Subcommittee held a hearing on the issue on 6/3.  The Senate has not yet scheduled a hearing.

Timing of action on Chile, Singapore FTAs becoming clear: Senate Finance Committee Chair Chuck Grassley (R-IA) wants Congress to pass bills implementing U.S. free trade agreements (FTAs) with Chile and Singapore before its August recess. Both bills will be considered under fast track rules of debate.

President to seek Jackson-Vanik exemption for Russia: President Bush will soon ask Congress to exempt Russia from provisions in the Jackson-Vanik amendment, clearing the path for normal trade relations (NTR) with Moscow. The White House wants Congress to act before Russian President Vladimir Putin’s visit to Washington in September. The Jackson-Vanik amendment denies NTR to countries that have “non-market” economies and that restrict emigration. Russia is now in compliance with both requirements, having been accorded “market economy” status in 2002.

Association health plans concept to see action: The full House’s vote on H.R. 660, the NAM-supported concept of association health plans (AHPs), was expected Thursday. AHPs won’t solve all health care ills and they won’t cause all health care ills, says NAM lobbyist Neil Trautwein, but can be an important part of the solution for smaller employers. Congress should get them into the market so we can see if they work.